Credit Agency Downgrades Circuit City
By Alan Wolf -- TWICE, 10/8/2008
Richmond, Va. — A credit reporting company that advises manufacturers on whether to ship goods to retailers has withdrawn its recommendation from Circuit City, according to reports in several media outlets, including the Richmond Times-Dispatch, the retailer’s hometown paper.
The firm, Bernard Sands, reportedly pulled its recommendation over concerns that Circuit City may not be able to pay its vendors. The call, which could affect the retailer’s ability to replenish inventory, followed Circuit’s announcement last week of a $239 million loss during its second fiscal quarter.
The company had $92.5 million in cash as of Aug. 31, down from $424.4 million a year earlier. Long-term debt was $66.8 million, and short-term borrowings, made against a $1.3 billion credit line secured by inventory, totaled $215 million at the end of the quarter.
